Question
1. (i)ABC Limited has a stable sales track record but does not expect to grow in the future. Its last annual dividend was $3.15. If
1.
(i)ABC Limited has a stable sales track record but does not expect to grow in the future. Its last annual dividend was $3.15. If the required rate of return on similar investments is 16 percent p.a., what is the current share price? (to the nearest cent; don't use the $ sign)
(ii)Techworld is expecting to pay out a dividend of $6.58 next year (year 1). After that it expects its dividend to grow at 4 percent per annum for the next five years (for years 2 to 6). What is the dividend that is expected to be paid in year 3? (to nearest cent; don't include $ sign)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started